Influence of Age of the Firm as Moderating Effect on the Relationship Between Knowledge Management and Organizational Performance of State Owned Commercial Enterprises in Kenya

Abstract

Purpose of this study was to examine the moderating influence of age of the firm on the relationship between knowledge management and organizational performance based on return on equity and return on assets of state owned commercial enterprises in Kenya. This study was based on explanatory and descriptive research designs since they were more appropriate to test the hypotheses. The target population comprised of 275 members of top management team of 55 commercial state-owned enterprises in Kenya, as at 31^st October 2016. The study utilized simple random sampling to select a sample of 268 members of top management team in the 55 commercial state-owned enterprises. Response rate of 71% was obtained and analytical tests conducted were Pearson correlation coefficients, one way ANOVA, and Multiple linear regression. The correlation analysis between age of the firm (moderator) and organizational performance were: return on asset (r = 0.02, p = 0.782) and return on equity (r = 0.102, p = 0.164). The result for One-Way ANOVA was F (14,172) =1.243, p = 0.249. The regression coefficient for interaction terms between age of the firm on performance and knowledge management were: knowledge acquisition, β= 0.111, t (2.47), p = 0.015; knowledge creation, β= 0.149, t (4.03), p = 0.000; knowledge conversion, β= -0.234, t (-4.178), p = 0.000; knowledge sharing β= -0.082, t (-1.843), p = 0.067; and knowledge storing β= -0.051, t (-1.156), p = 0.249 respectively. This concludes age of the firm does not moderate the relationship between knowledge management and organizational performance based on return on assets, but age of the firm moderates the relationship between knowledge management and organizational performance based on return on equity of state owned commercial enterprises in Kenya.

Keywords: Age of the firm, Moderation, Return on Assets (ROA), Return on Equity (ROE)

DOI: 10.7176/EJBM/11-3-02